(Reuters) -Online luxury retailer Farfetch is in talks with Apollo Global Management to secure emergency funding to shore up its finances, a person familiar with the matter said.
Shares of the retailer rose as much as 24% in afternoon trading. Its market capitalization stood at about $220.9 million as of last close, according to LSEG data.
The talks were reported earlier on Wednesday by Sky News.
Farfetch is in discussions with several parties on securing new financing and Apollo was only one of several firms in discussion, the person said.
Farfetch declined to comment. Apollo did not immediately respond to a request for comment.
The person familiar with the matter indicated it was unclear whether the new capital would be provided as debt or equity, or a combination of the two, and that a deal was far from certain.
On Tuesday, Moody’s downgraded the company’s credit rating deeper into “junk” territory and put it on review for a further cut, citing its deteriorating financial position.
In November, the Telegraph first reported Farfetch founder and CEO Jose Neves was in talks with top shareholders, including Cartier owner Richemont, to take the company private.
However, Richemont said it would not inject any cash into the retailer.
Founded in 2007, London-based Farfetch debuted on the New York Stock Exchange in September 2018 and has had a tumultuous time since its listing, grappling with weakening demand in the U.S. and China.
The latest U.S. credit card data from Barclays released on Wednesday showed that overall spending on luxury goods remained negative in November, down 15% year-on-year after a decline of 14% in October.
Credit card data from Citi, also released on Wednesday, showed purchases of luxury fashion were down 9.6% year-on-year in November, after an 11.4% decline in October, with steeper declines in department stores and online, down 13% in November year-on-year.
Farfetch is also a tech company powering e-commerce for high-end British department store Harrods and Italian fashion house Ferragamo, and is in the midst of doing the same for U.S. department store Bergdorf Goodman.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Krishna Chandra Eluri and Rosalba O’Brien)